Calls for Another Rent Freeze Imminent Despite Loosening of COVID Restrictions
With all meetings and hearings once again taking place virtually this spring, the City Rent Guidelines Board (RGB) was tentatively scheduled to begin deliberations on either April 1st or April 8th.
Coming off another politically-motivated rent freeze last year, RSA was certain that we would not end up in a position this year where we would have to argue against a fourth rent freeze in the last eight years. However, with the economic-impact of the COVID-19 pandemic still lingering one-year later, it is safe to assume that Mayor Bill de Blasio, who is also in the last year of his second term, will once again encourage the Board to consider another rent freeze.
At this juncture, it is unclear what the RGB reports will show in terms of tenant conditions and owner expenses. Over the next month, we will receive those reports from the Board at the public hearings and will summarize them in the May issue of the RSA Reporter. With property taxes once again increasing and fuel prices surging over the last three months in particular, we are hoping for a large increase in the Price Index of Operating Costs (PIOC). Although the Board has ignored this data at times during the de Blasio Administration, owner cost increases still continue to give us the best leverage when arguing for reasonable rent guideline increases.
The data that will likely hold even more weight this year will be the economic conditions for tenants outlined in the 2021 Income and Affordability (I&A) study. Last year, the numbers provided by the 2020 I&A reflected positive tenant conditions in 2019, but were overshadowed by the 2020 I&A Supplemental Report that reflected pandemic-caused unemployment numbers.
Despite the Supplemental Report showing that initial unemployment claims early in the pandemic (March 8, 2020-April 18, 2020) rose by 1,893% compared to the same six-week period from the year before, it also reflected major financial assistance provided by the federal government to offset the lockdown measures that cost millions of Americans their jobs.
For one, stimulus payments of up to $3,400 for a household of four were issued by mid-April of last year. At a minimum, individuals making up to $75,000 had been provided with $1,200 stimulus payments. Furthermore, unemployed individuals began earning as much as $4,800 per month, or as little as $3,400 per month, through the end of July with an additional $600 per week in unemployment assistance. The report highlighted that for many low-income tenants, this was more money than they were making while employed pre-pandemic.
In our presentations to the Board throughout last year’s deliberations, RSA firmly believed that, in addition to generous stimulus payments and enhanced unemployment benefits, unemployment numbers would eventually decrease and all lockdown measures would begin to loosen well-ahead of the effective date of RGB Order 52 (October 1, 2020). Despite these arguments and owner operating expense data that justified a rent increase, de Blasio’s Board Members once again played politics and enacted an historic third rent freeze under this Administration.
Although RSA’s predictions on unemployment numbers never fully came into fruition as a second wave of COVID-19 impacted the entire State throughout the fall and winter, the federal government continued to provide relief for those economically-impacted. After July, those who remained unemployed began making an additional $400 per week through December 31, 2020 and are now making an additional $300 per week through September 6, 2021. Two more stimulus checks were also issued by the Trump and Biden Administrations of $600 and $1,400 in January and March. The most recent stimulus payment provided as much as $5,600 for a household of four. Furthermore, the last two stimulus packages have provided the State with as much as $2.3 billion in rent relief that will allow eligible tenants to pay building owners for up to 12 months in back-rent and three months of prospective rent. The State will hopefully begin administering these payments in April (see page 1 of the April 2021 RSA Reporter).
The substantial financial assistance provided by the federal government for struggling tenants will certainly be reflected in the Board’s reports this year. This data, coupled with minimal financial relief for property owners, will give RSA incredible leverage when we make our case for rent increases during this year’s deliberations.
Over the next two issues of the Reporter, not only will we highlight the data provided by the RGB reports, but we will also prepare our members with important information that you will need to join our fight for the rent increases that you all desperately need. Prior to the pandemic, the poor policies of the de Blasio Administration and the draconian anti-owner laws passed by the State Legislature already had a negative impact on the City’s aging affordable housing stock. Another rent freeze, at a time when owners are struggling and tenants are receiving ample financial assistance, would be devastating for the City’s small property owners.
This is the most critical year in RGB history and it is crucial that our members join our efforts. Be on the lookout for updates over the next few months via the Reporter and email blast.